Term Life Insurance Claim Process: A Step-by-Step Guide

Have you ever wondered what happens when a loved one with term life insurance dies? How do you go about claiming the benefits? Understanding the term life insurance claim process is critical, especially in a nation like India where the regulations may appear difficult. This guide aims to break down the steps involved in claiming term insurance for NRI making it easy to navigate through the process. Let’s walk through each step together to ensure you can approach this with confidence and clarity.

Step-by-step guide to claiming term life insurance

• Inform the insurance company

The first action that needs to be taken is to report to the insurance company of the policyholder’s demise. This can be achieved by dialling the customer care number or by visiting the branch offices. Insurance companies offering online notification facilities to NRIs are many. Make sure you have the policy number as well as all the details of the deceased person readily available. 

• Obtain the claim form

After informing the insurance company, they will give the claim form. It is also possible to download this form from the website of any insurance company of your choice. Make sure to download or collect the correct form specific to term life insurance claims. 

• Gather necessary documents

Obtain all the relevant documents including the original policy document, death certificate of the policyholder, proof of identity of the beneficiary and any other medical report concerning the deceased. Additional documents like a copy of a passport and any other proof that the candidate is an NRI may be demanded in some cases. 

• Fill out the claim form

Complete the claim form clearly and with the truth. Be very careful with all the details, so there would be no differences between the two that would slow down the process. For the NRIs, the form must be having the international contact address and the details required for the remittance of funds. 

• Submit the claim form and documents

After completing the above-mentioned claim form, attach the relevant documents and forward it to the insurance company. This can be done face to face, by sending a letter or by using a computer using the procedures set by the particular company. Make copies of all documents that are submitted to the Ministry for your records. 

6. Follow up with the insurance company

It is also very important to keep contacting the insurance company to check on the progress of the claim. This is more so for NRIs who may not be in a position to access the physical office often as they may be engaged in business or other activities in the host country. Engage the customer through the phone, email or through online customer service platforms. 

• Verification process

The insurance company will begin the process of affirming the claim made by the policyholder. This includes confirming the death certificate, Policy details, and medical records. Be ready to provide extra information if it will be needed. 

• Field investigation (if required)

In some cases, the insurance company may conduct a field investigation to verify the circumstances of death. This is more common in cases where the policyholder passed away shortly after purchasing the policy. Always, fully cooperate with the investigators and give them all the information they may need. 

• Settlement of claims

After validation, the insurance company will proceed to settle the claim as per the details provided. This means determining the total amount that the insured person is to receive in the event of the insured risk occurring together with any bonuses. In the case of NRIs, cross-check that the amount is credited to the right international bank account. 

• Direct credit to a bank account

The insurance company will amount the claim to the claimant’s account via bank transfer. NRIs should make sure to give the right SWIFT codes and other bank details to not cause any problems. Acknowledge receipt of the amount and also ascertain the sum assured amount.

• Check for deductions

You also need to check the settlement statement for any deductions or charges applied. Make sure that they are justified and where they are taken, they are proportional to the policy terms. If there is any confusion regarding the coverage, it is advisable to contact the insurance company for further elaboration. 

• Tax implications

Consider how you want the claim amount to be paid and the tax consequences that come with it. In India, the amount received from a term life insurance policy is fully tax-free under section 10(10D) of the Income Tax Act. NRIs should also verify the current tax laws of the country they are residing. 

• Resolve disputes

In case of any controversies or inconsistencies in the payment for the claim, address the insurance company. You can utilise grievance-addressing systems or seek the services of the Insurance Ombudsman. Document all correspondences made with the spouses. 

• Partial claims

Some policies allow partial claims depending on the policy type like the terminal illness or critical illness riders. Know the policy provisions and if you can apply for partial payments when necessary. It can offer cash flow during bad periods, which is important for a firm.

• Timely intimation

Make sure that the claim is intimated within the period stipulated in the policy document. Such claims could be denied or take longer to process, which could result in complications with the insurance claim. For all NRIs, the use of these digital platforms should ensure that the company is notified as soon as possible. 

• Keep policy details updated

It should also be kept up to date with policyholder contact information, nominees for policy benefits, and their dates of birth. This eliminates confusion when processing claims and helps in preventing the occurrence of unnecessary delays due to outdated records. It is also important to review and update these details periodically.

Ending note

Navigating the term life insurance claim process may be difficult, but understanding each stage makes it doable. From alerting the insurance company to getting the claim money, each step demands meticulous attention to detail. NRIs should pay close attention to foreign documents and bank data to guarantee a seamless transaction. By following this guidance, you may approach the claim procedure with confidence, ensuring that your financial benefits arrive without delay. Remember, remaining informed and organised is critical to a successful claim settlement.